Dhirendra Tripathi MoneycontrolAn internal committee set up by Power Finance Corp has found no wrongdoing in Rs. 993.25 crore of loans sanctioned by the power sector financier to Suzlon Energy in two tranches over 2010-13, an official familiar with the development told Moneycontrol.
The panel was set up on the advice of Central Vigilance Commission which wanted PFC to form an internal panel to study whether the state-owned lender’s repeated sanction of loans to corporates on account of cost overruns in various projects was justified.
The panel also had to study the reasons behind the delays and the tendency of accounts turning into non-performing assets.
The PFC committee found that there were no cost overruns and that the additional loan was sanctioned as Suzlon could not get the required disbursements from the three banks it was negotiating the loans with -- Jammu & Kashmir Bank, Indian Overseas Bank and IDBI Bank. “To conclude, the committee noted that the support extended to the borrower by lenders including PFC with respects to approvals accorded and debt disbursements led to the successful revival of the company. It is also observed that PFC dues are up to date as on 29.11.2016,” the PFC panel said in its findings.
CVC had first wanted PFC to set up an internal committee to probe the issue but the company requested CVC to do that job as an internal committee probing its own company officials didn’t make sense.
“The CVC insisted that PFC first set up a committee of its own. The internal committee’s findings will now be looked into by CVC’s own panel,” the official said.
PFC’s twin loans to Suzlon – one of Rs 827 crore sanctioned in May 2010 and another of Rs 166.25 crore approved in March 2012 – were probed by the panel. Suzlon Energy went through a crisis during 2011-13 when it defaulted on its foreign currency convertible bonds. The Pune-headquartered company went through a corporate debt restructuring -- the CDR empowered group approving the plan in December 2012. PFC wasn’t a part of CDR.
PFC gave its own proposal for restructuring and a final agreement between the lender and Suzlon was then signed in August 2015.
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